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Growth 2012: From backyard to boom

Growth 2012: From backyard to boom

iiNet: The fourth in a series of 10 interviews with channel-relevant technology companies that have achieved significant growth over the last three years

Growth is the fundamental aim of all businesses if they want to survive. Over the next two weeks ARN is looking at 10 channel-relevant technology companies that have achieved significant growth over the last three years. Our writers reveal some interesting game plans and methods of growth. The companies are drawn from the latest Deloitte Technology Fast 50 program. Now in its 11th year, the program ranks 50 of Australia’s fastest-growing public or private technology companies, based on percentage revenue growth over three years (2009 to 2011). For further information on the Deloitte Technology Fast 50 visit www.tech50.com.au.


iiNet

  • Deloitte Technology Fast 50 position: 45
  • Interviewee: CEO Michael Malone
  • Key quote: “It’s very much now about horizontal expansion”


For Internet Service Providers (ISP), iiNet, the changing broadband landscape had increased its commitment to helping Australians connect better.

Founded in a suburban garage back in 1993, iiNet has grown over the ensuing 18 yeatrs to become one of Australia’s top DSL ISPs.

iiNet CEO, Michael Malone, founded the company just before he was graduated from University. The lack of proper Internet access at his campus, due to there being no ISPs in Western Australia at that time, made him think of tapping into the telecommunications industry.

Malone surveyed a few of his friends to work out whether his idea was feasible. Their positive responses led to the start of the company.

Since then, the ISP has led the market with its products and grown extensively.

Deloitte placed the company 45th in its Deloitte Technology Fast 50 Australia 2011 list with a growth figure of 70.91 per cent.

“When I started the company, it was really driven by good timing and the change of technology itself. Back then, the Internet was very difficult to use and arcane with a lot of complicated commands,” Malone said.

The introduction of Netscape in 1994, the first Web browser to work on Windows 3.11, fueled the developments within the telecommunications space, especially for the Internet.

“In the last 10 years, the adoption of iiNet was also fueled by the move from dial-up to broadband,”he said. “iiNet was the first one out there to provide national high-speed ADSL 2+ and we were able to take advantage of that when our competitors were still offering slower speeds.”

The company, like some of its fellow Top 50 listees, has also grown through acquisition.

It most recently acquired fellow ISP, Internode, for $105 million in December and TransACT for $60 million in November. It previously bought smaller ISPs such as Netspace and Westnet.

According to Malone, its purchase of such companies has brought the ISP substantial network resources and increased the its presence within Victoria and the ACT.

He said acquisitions, mergers and smaller ISPs shutting down had resulted in a significant decrease in numbers and as a result the top four had about 85 per cent market share.

iiNet now aims to penetrate into the small business, government and corporate sectors, a key strategic focus, with the acquisitions.

Malone expects the push towards mobility to play to the advantage of the company in the near future.

“With people using a range of mobile devices – such as tablets, slim laptops, mobile phones, and dedicated technologies like games consoles as well – it expresses itself into how people use Wi-Fi now,” he said.

According to Malone, using all these devices creates a complex home environment and application providers are starting to build up their infrastructures assuming consumers’ connection to broadband, eventually leading to consumers’ increased use of it.

For iiNet, the push for the next 10 years will be less on connecting people to broadband as that market reaches saturation and more on what it is going to offer with it.

“It’s very much now about horizontal expansion. We are going into selling telephony voice-over IPs, mobile devices, manufacturing our own hardware, looking at online storage and business-to-business products as well,” Malone said.

In 2012, consumers can expect new products from the ISP.

Malone said that with IPTV expected to take off this year, there will be developments in that space.

Its recent sale of mobile devices is also an important area which Malone wants iiNet to become a key player in this year.


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